Form FC TRS Filing

Form FC-TRS Filing: Procedure, Document & Penalties

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Introduction

Form FC-TRS is a crucial compliance requirement under the Foreign Exchange Management Act (FEMA), 1999, used to report the transfer of shares or equity instruments between a resident and a non-resident in India. This reporting mechanism is governed by the guidelines issued by the Reserve Bank of India (RBI) to regulate foreign investment transactions and ensure transparency in cross-border capital movements.

Whether the transfer of shares occurs through sale, gift, or stock exchange, filing Form FC-TRS is mandatory. The form must be submitted within 60 days from the date of transfer through the RBI’s FIRMS portal. Non-compliance or delayed filing can attract significant penalties under FEMA.

Having a clear understanding of the FC-TRS filing procedure is essential to avoid regulatory risks and ensure smooth completion of foreign investment transactions.

In this article, we provide a comprehensive overview of Form FC-TRS, covering:

  • Meaning and legal purpose

  • Applicability and timelines

  • Documents required

  • Step-by-step filing procedure

  • Penalties for non-compliance

This guide will help companies, investors, and professionals stay compliant with FEMA and RBI regulations efficiently and on time.

What is FC-TRS?

Form FC-TRS is a statutory filing that must be submitted to the Reserve Bank of India (RBI) when shares or other equity instruments of an Indian company are transferred between a resident and a non-resident (NR).

Filing Form FC-TRS is a mandatory compliance under the Foreign Exchange Management Act (FEMA), 1999, and it ensures that all foreign exchange transactions relating to share transfers are carried out in accordance with India’s foreign investment regulations.

This filing helps the RBI monitor, regulate, and maintain transparency in cross-border equity transactions, whether the transfer takes place through sale, gift, or other permitted modes. Failure to file Form FC-TRS within the prescribed timeline may result in penalties under FEMA.

When FC-TRS Required?

Cases Where Form FC-TRS Is Required

Form FC-TRS (Foreign Currency – Transfer of Shares) is required to be filed in the following two situations:

1. Transfer of Shares from Resident to Non-Resident

Whenever an Indian resident transfers shares or other equity instruments of an Indian company to a non-resident, filing Form FC-TRS is mandatory.

2. Transfer of Shares from Non-Resident to Resident

Similarly, when a non-resident transfers shares or equity instruments to an Indian resident, Form FC-TRS must be filed.

Filing Timeline & Regulatory Framework

In both cases, Form FC-TRS must be submitted within 60 days from the date of share transfer.
This filing requirement is governed by the Foreign Exchange Management Act (FEMA), 1999, which regulates foreign exchange transactions in India.

The purpose of FC-TRS filing is to:

  • Monitor cross-border share transfers

  • Track Foreign Direct Investment (FDI)

  • Ensure regulatory transparency and compliance with foreign exchange laws

Non-compliance or delay in filing Form FC-TRS may attract penalties under FEMA.

Required Documents for FC-TRS Filing

Documents Required for Filing Form FC-TRS

The documents to be attached with Form FC-TRS depend on the nature of the share transfer. Below is the complete list of documents required for each type of transfer as prescribed under FEMA and RBI guidelines.

1. Transfer of Shares by Way of Gift

In case shares or equity instruments are transferred without consideration (gift), the following documents must be attached:

  1. Relevant Regulatory or Government Approvals, if applicable

  2. Consent Letter duly executed between the donor and the donee

  3. Non-Resident Declaration from the transferee/transferror, as applicable

  4. Acknowledgement of Initial Allotment (FC-GPR), if available

  5. Valuation Certificate issued by a Chartered Accountant or SEBI-registered Merchant Banker

    • The valuation report must not be older than 90 days from the date of transfer

2. Transfer of Shares by Way of Sale (Off-Market Transfer)

For share transfers involving consideration through a private arrangement, the following documents are required:

  1. Share Transfer Agreement or Form SH-4, duly executed

  2. Consent Letter between buyer and seller

  3. Non-Resident Declaration

  4. Acknowledgement of FC-GPR or previous FC-TRS, if applicable

  5. Proof of Consideration, such as:

    • Debit advice

    • Foreign Inward Remittance Certificate (FIRC) / Outward Remittance Certificate

    • KYC report of the remitter from the authorised dealer bank

  6. Tax Clearance Certificate / No Objection Certificate, if applicable

  7. Government or Regulatory Approvals, wherever required under FEMA or sectoral laws

3. Transfer of Shares by Sale Through Stock Exchange

Where shares are transferred through a recognized stock exchange, the following documents must be furnished:

  1. Contract Notes for purchase and sale issued by a registered broker

  2. Broker’s Note containing trade details

  3. Non-Resident Declaration

  4. Acknowledgement of FC-GPR or FC-TRS, if available

  5. Tax Clearance Certificate / No Objection Certificate, if applicable

Important Notes

  • All documents must be properly signed, dated, and legible.

  • Any mismatch in valuation, consideration, or declarations may lead to queries or rejection on the FIRMS portal.

  • Filing must be completed within 60 days of the share transfer date to avoid penalties under FEMA.

Stepwise Procedure for FC-TRS Filing

 

Here is a professionally refined, step-by-step, and compliance-accurate version of the FC-TRS filing procedure, suitable for a website guide, client advisory, or compliance manual:

Step-by-Step Procedure for Filing Form FC-TRS (FIRMS Portal)

Form FC-TRS is filed through the Single Master Form (SMF) on the FIRMS portal of the Reserve Bank of India. The filing process involves multiple approvals and user registrations before actual submission.

Step 1: Creation of Entity User / Entity Master

This step is mandatory for first-time reporting entities.

  • A New Entity User must be created on the FIRMS portal.

  • Basic company details are required, such as:

    • CIN of the Indian company

    • Company name and registered address

    • Authorised person’s details (email, mobile)

  • An Authority Letter authorising the person to act on behalf of the entity must be uploaded.

🔹 The Entity User request is verified and approved by the Authorised Dealer (AD) Bank within 1–2 working days.

Entity Master Form Submission

  • After Entity User creation, login credentials are sent to the authorised person’s email.

  • The Entity Master Form is then submitted with:

    • Issue details

    • Capital structure

    • Company background details

🔹 Approval by AD Bank generally takes 2–3 working days.

Step 2: Registration of Business User (BU)

Once the Entity Master is approved:

  • A Business User (BU) must be registered.

  • The BU is the authorised individual who will report foreign investment transactions.

  • During registration, the BU must:

    • Select the IFSC code of the AD Bank branch that will handle e-KYC and approvals.

⚠️ Important Note
If the reporting bank branch or IFSC changes later, the BU must re-register with the new IFSC and obtain a separate login.

🔹 After submission, the BU registration is verified by the AD Bank.
🔹 Approval or rejection is communicated via email.
🔹 Login credentials are issued upon approval.
⏱️ Time taken: 4–5 working days.

Step 3: Login to FIRMS Portal & Reset Password

  • Login using BU credentials on the FIRMS portal.

  • Reset the default password to activate the account.

Step 4: Access Single Master Form (SMF)

The Single Master Form (SMF) enables reporting of the following FEMA returns:

  • FC-GPR

  • FC-TRS

  • LLP-I

  • LLP-II

  • CN

  • DRR

  • ESOP

  • DI

  • InVi

Steps:

  1. Login to FIRMS Portal

  2. Navigate to SMF Section

  3. Select Return Type → FC-TRS

  4. Click “Add New Return”

The FC-TRS form will open for data entry.

Step 5: Fill FC-TRS Form (Tab-wise)
Tab 1: Common Details

  • Basic information regarding:

    • Nature of transaction

    • Company and transfer details

Tab 2: Transfer Details

  • Transfer type (Sale / Gift / Stock Exchange)

  • Details of transferor and transferee

  • Number of shares and consideration terms

Tab 3: Remittance Details

  • Applicable only in case of sale

  • Remittance amount, mode, and bank details

  • (Not required for gift transactions)

Tab 4: Shareholding Pattern

  • Updated post-transfer shareholding structure

  • Must match company records exactly

Step 6: Submit the Form

After completing all tabs:

  • Click Submit to forward the form to RBI via the AD Bank

  • Alternatively:

    • Save as Draft – for later review

    • Reset – to clear all entries

    • Back – to return to dashboard without saving

Approval & Post-Submission Process

  • Approval or resubmission queries are communicated via email.

  • If clarifications are sought, the form must be resubmitted with revised documents.

  • Upon approval:

    • RBI shares fee and payment details

    • Fees must be paid within 7 days of approval

⚠️ No separate acknowledgement is issued by RBI after fee payment.

Key Compliance Notes

  • FC-TRS must be filed within 60 days of share transfer

  • Delay or incorrect reporting may attract FEMA penalties

  • Consistency between valuation, remittance, and shareholding data is critical

Fees for Form FC-TRS Filing

 

There are no government fees applicable for filing Form FC-TRS with the RBI. However, professional fees may vary depending on the complexity of the transaction and the expertise of the service provider.

At BizCatalyst Technologies, we offer Form FC-TRS filing services at an affordable starting fee of ₹4,999 only, ensuring accurate compliance, timely reporting, and end-to-end assistance throughout the filing process. Our experienced professionals handle documentation, FIRMS portal procedures, and AD Bank coordination to ensure smooth and effective compliance under FEMA regulations.

Penalties in Delay Filing

If there is a delay in filing Form FC-TRS (Foreign Currency–Transfer of Shares), penalties are imposed under the FEMA guidelines as prescribed by the RBI.

Penalty for Delayed FC-TRS Filing (Late Submission Fee – LSF)

The Late Submission Fee (LSF) is calculated as follows:

LSF = ₹7,500 + (0.025% × A × n)

Where:

  • A = Amount involved in the delayed reporting

  • n = Number of years of delay, rounded upwards to the nearest month and expressed up to two decimal places

Maximum Cap on Penalty

As per the RBI circular, the maximum Late Submission Fee cannot exceed the amount involved in the delayed reporting.

Consequences of Prolonged Non-Compliance

If the Late Submission Fee is not paid within 3 years from the due date of filing, the case may be subject to penal action under the Foreign Exchange Management Act (FEMA), 1999, which can involve higher penalties and enforcement proceedings.

Important Notes

  • Timely filing of Form FC-TRS (within 60 days from the date of transfer) is mandatory.

  • Delays not only attract monetary penalties but may also create complications in future FEMA or RBI compliances.

To avoid penalties and regulatory issues, it is strongly advisable to ensure accurate and timely FC-TRS filing with professional assistance.

Time taken in Form FC-TRS Filing

The time required for filing Form FC-TRS largely depends on the nature of the transaction and the accuracy and completeness of documentation. When all required documents are properly prepared, verified, and submitted without discrepancies, the process generally takes 10 to 15 working days.

However, the timeline may vary based on factors such as AD bank verification, clarifications sought by the RBI, or the complexity of the share transfer (sale, gift, or stock exchange transaction).

BizCatalyst Technologies ensures completion of the FC-TRS filing within 15 days, covering every critical step including documentation review, form preparation, verification, submission on the FIRMS portal, and coordination with the AD bank—making the entire compliance process smooth, accurate, and hassle-free.